General Motors has revised its financial expectations for 2024 following strong performance in its second quarter, surpassing Wall Street projections. The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering its net income expectations for shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, exceeding expectations and showing a growth of over 7% compared to the previous year, compared to the $45 billion anticipated by analysts. Earnings per share reached $3.06, surpassing the expected $2.71 and representing a 60% increase from 2023. The company’s net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading and has seen a year-to-date increase of more than 37%. The automaker also declared a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In her letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs. She mentioned plans to introduce eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra reaffirmed GM’s commitment to a disciplined growth strategy in the electric vehicle (EV) segment, despite earlier comments that the company would fall short of its goal to produce 1 million EVs in North America by the end of 2025 due to a market slowdown. Nonetheless, she noted that EV sales increased last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which has scaled back operations following a previous incident. The company will discontinue its Origin vehicle, focusing instead on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge associated with halting production of the Origin.
During a conference call, Barra addressed concerns from regulators regarding the Origin’s distinct lack of a steering wheel, stating that using the Bolt would mitigate those worries. This adjustment also aims to reduce costs per unit and optimize resource allocation.
Lastly, GM is exploring restructuring its joint venture in China with SAIC Motor due to ongoing losses, having recorded a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is a 50% decline from the previous year.